Aggregate demand shifts right if at a given price level
A)net exports rise and shifts left if the money supply increases.
B)net exports rise and shifts right if the money supply increases.
C)net exports fall and shifts left if the money supply increases.
D)net exports fall and shifts right if the money supply increases.

Question

Quizplus · Accepted Answer

An increase in money supply would lead to a decrease in interest rates, which in turn would lead to an increase in investment and consumption spending. This would cause aggregate demand to shift to the right. Also, if net exports rise, total spending in the economy would increase, leading to a rightward shift in aggregate demand. Therefore, option B is the correct choice.

Aggregate Demand Shifts Right If at a Given Price Level